Bitcoin and Ethereum investors are facing severe losses, according to Decrypt. The crypto market has seen over 8 million BTC fall underwater amid a major downturn in 2026, significantly affecting altcoins like Ethereum and XRP.
What happened
The cryptocurrency market has experienced a significant drawdown in 2026, driven by Bitcoin’s poor performance. Nearly half of Bitcoin’s circulating supply once showed profit, but that number has sharply declined, with over 8 million BTC now at a loss. “This highlights the scale of the recent market reset,” on-chain analytics firm Glassnode reported on May 27, 2026.
Similarly, Ethereum’s profitability has deteriorated. Glassnode stated, “The share of Ethereum supply sitting at more than 3x profit has dropped to 11%, the lowest reading since February 2017.” While previous cycles saw over 50% of Ethereum’s supply in profit at peak, this current cycle never reached that threshold, indicating a fundamental compression in profitability.
Why it matters
The losses in the crypto market reflect a broader bearish sentiment, with many investors feeling the strain from unrealized losses. According to Gracy Chen, CEO of Bitget, “A meaningful portion of the market is sitting on unrealized losses, which historically has coincided with lower sentiment and greater caution.” Investors are becoming more discerning, focusing on fundamentals rather than hype, which could reshape the landscape for future investments.
Background
On June 1, 2026, Bitcoin was priced at $61,080. Since then, predictions for its next move indicate a 75% chance of dropping to around $55,000. This volatility, combined with geopolitical uncertainties, has contributed significantly to the current state of the cryptocurrency market.
What’s next
Industry experts anticipate continued scrutiny over altcoins, particularly those lacking strong fundamentals. A decisive shift towards cash-flow-generating tokens is expected as market participants reassess their strategies amid ongoing market pressures.
